India slams door on $1tn WTO deal over customs rules

​The World Trade Organization got a surprise setback on Thursday when India, pushing for concessions on agricultural stockpiling, vetoed plans for universal customs rules. The deal could have added $1 trillion and 21 million jobs to the world economy.

The July 31 deadline on
the first proposal for major global economic reform in two
decades - a series of customs procedures known as "trade
facilitation" – left negotiators empty handed after India refused
to sign up to it.

India, with its large number of poor and new nationalist
government, had demanded the exclusive right to subsidize and
stockpile grains which is not permitted by WTO rules.

The WTO, experiencing what may be its worst setback in its
19-year history, reluctantly admitted defeat.

"We have not been able to find a solution that would allow us
to bridge that gap," WTO Director-General Roberto Azevedo
told negotiators in Geneva just hours before the deadline was set
to lapse.

Some analysts are of the opinion the failure represents the
beginning of a new era of trade deals, which will depend more on
individual economies forging their own initiatives, as opposed to
attempting to force global reform.

"Today’s developments suggest that there is little hope for
truly global trade talks to take place," Jake Colvin at the
National Foreign Trade Council, a leading US business group, told
Reuters.

"The vast majority of countries who understand the importance
of modernizing trade rules and keeping their promises will have
to pick up the pieces and figure out how to move forward."

Whether or not other countries will pick up the dropped ball and
try to move forward despite the loss is not yet clear, but the
present mood is noticeably downbeat.

"We're obviously sad and disappointed that a very small
handful of countries were unwilling to keep their commitments
from theDecemberconference in Bali, and we agree with
the Director-General that that action has put this institution on
very uncertain new ground," US Ambassador to the WTO Michael
Punke told reporters.

Meanwhile, there is speculation that some countries may decide to
go ahead with the plan without India’s support.

However, Azevedo said that while the world’s largest economies
had choices on how to respond to the failed talks, the poorest
economies would suffer the brunt of the fallout.

"If the system fails to function properly then the smallest
nations will be the biggest losers," he said. "It would
be a tragic outcome for those economies - and therefore a tragic
outcome for us all."